41-80

A company bought an asset for 2,000 (10 year useful life) After 5 years it is impaired to 800. What is the double entry?

• Dr Asset/Cr P/L 200

• Dr Asset/Cr P/L 800

• Dr P/L / Cr Asset 200

• Dr P/L / Cr Asset 800

Let’s say you need 100,000 to build a house in 8 months but you’re going to use general current borrowings to fund yourself rather than getting a specific loan. Your current borrowings are: 1 million of 10% loan finance and 2 million of 6% loan finance. What borrowing costs should be capitalised?

• 4,888

• 10,000

A sub has 100 net assets book value and a contingent liability with no book value but a 10 fair value At acquisition what is the value of the sub for the goodwill calculation?

• 90

• 110

How much is Goodwill?
Non Current Assets. 1,300
Current Assets. 600
Share Capital. 100
Share Premium. 100
Reserves. 1,100
Current Liabilities. 100
Non Current Liabilities 500
S was bought out for 1,500. The FV of S's net assets was 100 more than the book values. How much is Goodwill?

• 50

• 100

A company has a legal obligation to remove an asset after it has finished with it in 8 years time. How is this dealt with in the accounts?

• Dr Expense Cr Cash

• Dr Asset Cr Provision

What should be capitalised as the cost of this intangible asset?
A college acquires new technology that will revolutionise its teaching. It is software for a robot that reads aloud from the textbook (you may have seen one of these before!). The costs are:
Original cost of the software. 1,000
Discount provided. 200
Staff training incurred in operating the robot. 400
Testing of the software. 100
What should be capitalised as the cost of this intangible asset?

• 800

• 900

• 1000

Contract assets and receivables shall be accounted for in accordance with ______

• IFRS 15 Revenue

• IFRS 9 Financial instruments

A delivery Van of ABC plc has damaged badly due to an accident in highway. The cost of repair will be $700. What type of expenditure is it?

• Capital expenditure

• Revenue expenditure

If the agreed date of payment by a customer is later than the date on which goods or services are transferred to that customer, part of the consideration should always be treated as finance income (not revenue). True or False?

• True

• False

A cash flow statement provides information that enables users to evaluate the changes in:

• Solvency

• Its liquidity

• Its financial structure

• Net assets of an undertaking